Narayana Hrudayalaya Ltd Directors Report.

Dear Members,

Your Directors have immense pleasure in presenting their 21st Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended March 31, 2021.

1. FINANCIAL SUMMARY/HIGHLIGHTS, PERFORMANCE AND STATE OF AFFAIRS OF THE COMPANY

( H in Million, except per share data)

Particulars Consolidated Standalone
2020-21 2019-20 2020-21 2019-20
Income
Revenue from Operations 25,823.46 31,278.09 16,539.29 22,393.51
Other Income 281.76 237.64 764.99 241.42
Total Income 26,105.22 31,515.73 17,304.28 22,634.93
Total Expenditure* 24,002.42 27,048.99 16,850.49 19,826.60
Earnings Before Interest, Tax, 2,102.80 4,466.74 453.79 2,808.33
Depreciation and Amortisation and Exceptional items
Less: Interest & Depreciation 2,595.10 2,710.69 1,663.65 1,768.29
Less: Exceptional items - (108.70) - -
Profit/(Loss) before tax (492.30) 1,647.35 (1,209.86) 1,040.04
Less: Income Tax (412.73) 422.53 (423.13) 362.61
Profit/(Loss) After Tax (74.57) 1,224.82 (786.73) 677.43
Add: Share of Profit/(Loss) in (68.37) (34.30) - -
Associate (Net)
Profit/(Loss) for the year (142.94) 1,1920.52 (786.73) 677.43
Add: Other Comprehensive Income (20.17) 46.58 18.02 (46.00)
Net Profit/(Loss) (163.11) 1,237.10 768.71 631.43
Earnings Per Share (Basic) (0.70) 5.86 (3.88) 3.34
Earnings Per Share (Diluted) (0.70) 5.86 (3.88) 3.34

*Expenses before depreciation and amortisation, finance costs and exceptional items.

2. PERFORMANCE OVERVIEW

Standalone Operations

• During the year under review, the total income of the company decreased from H 22,634.93 Million in 2019-20 to H 17,304.28 Million in 2020-21.

• Earnings Before Interest, Tax, Depreciation and Amortization and Exceptional Items decreased from H 2,808.33 Million in 2019-20 to H 453.79 Million in 2020-21.

• The company incurred loss of H 786.73 Million in 2020-21 vis-a-vis profit of H 677.43 Million in 2019-20.

Consolidated Operations

• During the year under review, the total income of the company decreased from H 31,515.73 Million in 2019-20 to H 26,105.22 Million in 2020-21.

• Earnings Before Interest, Tax, Depreciation and Amortization and Exceptional Items decreased from H 4,466.74 Million in 2019-20 to H 2,102.80 Million in 2020-21.

• Profit for the year decreased from H 1,190.52 Million in 2019-20 to loss of H 142.94 Million in 2020-21.

Your Company continues to emphasise on maintaining the highest standards of clinical excellence, patient care and satisfaction. With regards to accountability and governance, your Company continues to ensure an environment of transparency and responsibility while aiming for the highest standards of corporate governance and trust.

3. TRANSFER TO RESERVES

Dividend and transfer to reserves

Based on the Company’s performance, the Board has not recommended any dividend for the financial year under review.

Pursuant to SEBI’s notification dated July 8, 2016, the Board of Directors of the Company have formulated a Dividend Distribution Policy ("the policy"). The policy is also available on our website (URL: https://www.narayanahealth.org/ sites/default/files/download/codes-policies/DIVIDEND-DECLARATION-POLICY-website.pdf).

4. SUBSIDIARY AND ASSOCIATE COMPANIES

Review of performance of Subsidiaries and Associate Companies

As on March 31, 2021, the Company has 11 Subsidiary Companies and 2 Associate Companies. Pursuant to Certificate of Merger issued by the office of Registrar of Companies, Cayman Islands, effective April 1, 2021, our wholly owned subsidiary company Narayana Cayman Holdings Ltd. has merged with its step-down subsidiary, Health City Cayman Islands Ltd. Consequently, the Company currently has 10 Subsidiary Companies and 2 Associate Companies. Except Health City Cayman Islands Ltd., none of the other subsidiary companies is a Material Subsidiary within the meaning of Material Subsidiary as defined under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as amended from time to time.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the Financial Statements of the Company’s Subsidiaries and Associates in Form AOC-1, that forms part of this Report is attached as Annexure I.

Pursuant to Section 129 of the Companies Act, 2013, the Consolidated Financial Statements of the Company, prepared in accordance with the relevant Accounting Standards specified under Section 133 of the Companies Act, 2013 read with the Rules made thereunder, forms part of this Annual Report.

Further, pursuant to provisions of Section 136 of the Companies Act, 2013:

i. The Annual Report of the Company, containing therein its standalone and consolidated financial statements are available on the Company’s website i.e., https://www. narayanahealth.org/stakeholder-relations/annual-reports.

ii. The audited financial statements of Subsidiary Companies are available on the website of the Company i.e., https:// www.narayanahealth.org/stakeholder-relations/annual-reports.

The brief details of all the Subsidiary and Associate Companies are as follows:

i. Narayana Hrudayalaya Surgical Hospital Private Limited (NHSHPL)

NHSHPL is a wholly owned subsidiary of the Company and is engaged in the business of operating and maintaining hospitals, clinics, health centers, nursing homes and other related activities. This subsidiary operates a multispecialty hospital in Mysore, offering a wide range of services across specialties, which includes cardiology, cardiac surgery, nephrology, urology, neurology, neuro-surgery, endocrinology, orthopedics, internal medicines, obstetrics, gynecology, pediatrics, neonatology, gastroenterology and oncology to name a few. The subsidiary also operates and runs the Dharamshila Narayana Superspecialty Hospital in Delhi under a Service Agreement with Dharamshila Cancer Foundation and Research Centre. Further, other financial information is included in Form AOC-1.

ii. Meridian Medical Research & Hospital Limited (MMRHL)

MMRHL is a subsidiary of the Company and is engaged in the business of operation of hospitals, clinics, health centers, and other related activities. This subsidiary operates two hospitals in Howrah offering multispecialty and super-specialty healthcare services which includes nephrology, urology, neurology, neurosurgery,etc. Further, other financial information is included in Form AOC-1.

iii. Narayana Vaishno Devi Specialty Hospitals Private Limited (NVDSHPL)

NVDSHPL is a wholly owned subsidiary of the Company and is engaged in the business of providing healthcare services of superior quality with state-of-the-art technology, clinics, health centers, diagnostic centers and other related activities. This subsidiary operates a hospital at Kakryal near Katra in Jammu which caters to patients across more than 20 different specialties, with radiology, obstetrics & gynecology, oncology, etc. Further, other financial information is included in Form AOC-1.

iv. Narayana Hospitals Private Limited (NHPL)

NHPL is a wholly owned subsidiary of the Company and is authorised to engage in the business of operation of hospitals, clinics, health centers, nursing homes and other related activities. This subsidiary is yet to commence operations. Further, other financial information is included in Form AOC-1.

v. Narayana Institute for Advanced Research Private Limited (NIARPL)

NIARPL is a wholly owned subsidiary of the Company and is authorised to engage in the business of research and development work connected with faculty of medicines and operation of hospitals, clinics, health centers, nursing homes and other related activities. This subsidiary is yet to commence operations. Further, other financial information is included in Form AOC-1.

vi. Narayana Health Institutions Private Limited (NHIPL)

NHIPL is a wholly owned subsidiary of the Company and is authorised to engage in the business of running medical colleges and operation of hospitals, clinics, health centers, nursing homes and other related activities. This subsidiary is yet to commence operations. Further, other financial information is included in Form AOC-1.

vii. NH Health Bangladesh Private Limited (NHBPL)

NHBPL is a step-down subsidiary of the Company, incorporated on July 22, 2018 and is authorised to engage in the business of running and operation of hospitals, clinics, health centers, nursing homes and other related activities. NHBPL has commenced the operation of a Heart Centre in Bangladesh during the financial year 2019-20. Further, other financial information is included in Form AOC-1.

viii. Narayana Cayman Holdings Limited (NCHL)

NCHL was a wholly owned subsidiary of the Company with the power and authority to carry out any object not prohibited by the Companies Law of the Cayman Islands. Further, other financial information is included in Form AOC-1. This subsidiary has ceased to exist from April 1, 2021 pursuant to its merger with Health City Caymans Islands Ltd.

ix. Narayana Holdings Private Limited (Narayana Holdings)

Narayana Holdings Private Limited, Mauritius is 100% step-down subsidiary of the Company incorporated in the Republic of Mauritius in April, 2016. Further, other financial information is included in Form AOC-1.

x. Health City Cayman Islands Limited (HCCI)

HCCI is a Company incorporated in Cayman Islands and operates a hospital in Cayman Islands. HCCI was a 100% step down subsidiary of the Company during the year under review. HCCI is a Material Subsidiary within the meaning of Material Subsidiary as defined under SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015. HCCI became a direct wholly owned subsidiary of the Company effective April 1, 2021 pursuant to merger of its immediate holding company NCHL with HCCI. Further, other financial information is included in Form AOC-1.

xi. Narayana Health North America LLC

Narayana Health North America LLC is a subsidiary Company incorporated in Delaware, United States of America on April 9, 2019. The Company commenced its operations during the year. Further, other financial information is included in Form AOC-1.

Associate Companies

i. Cura Technologies Inc (Cura)

Cura is an Associate Company incorporated in the State of Delaware, USA, in which the Company holds 43.80% of common stock of the Associate Company through NCHL and the remaining shares are held by Mr. Samir Mitra and others. This company is engaged in the business of developing software and technology to transform delivery of patient care. Further, other financial information is included in Form AOC-1.

ii. ISO Healthcare

ISO Healthcare is an Associate Company incorporated in Mauritius in which the Company holds 18.52% of the equity shares through its step-down subsidiary Narayana Holdings. Further, other financial information is included in Form AOC-1

The Company has adopted a Policy for determining Material Subsidiaries in line with Regulation 16 of the SEBI Listing Regulations. The Policy, as approved by the Board, is uploaded on the Company’s Website (URL: https://www.narayanahealth.org/sites/default/ files/download/codes-policies/Policy_for_material_ subsidiary.pdf)

5. SHARE CAPITAL

As on March 31, 2021, the Authorized Share Capital of the Company is H 3,800.00 Million comprising of 30,90,00,000 Equity Shares of H 10 each and 7,10,00,000 Preference Shares of H 10 each. The Paid-up Share Capital is H 2,043.61 Million comprising of 20,43,60,804 Equity Shares of H 10 each.

6. DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the Directors would like to state that:

i) In the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any.

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The Directors have prepared the annual accounts on a going concern basis.

v) The Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.

vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant Board Committees, including the Audit, Risk and Compliance Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during FY 2020-21.

7. BOARD OF DIRECTORS AND COMMITTEES

Composition of Board of Directors and changes thereof

As on March 31, 2021, the composition of your Company’s Board has an ideal combination of Executive, Non-Executive and Independent Directors and thereby ensuring separation of management and governance while maintaining its independence. In compliance with the terms of the SEBI Regulations, Independent Directors constitute more than 50% of the Board strength including an independent woman director as required to be appointed by top 500 listed entities.

From January 18, 2021 Upto January 17, 2021
Type of Directorship No. of Directors % of Board Strength No. of Directors % of Board Strength
Executive Directors 3 33.33% 3 30.00%
Non- executive & Non- independent Directors 1 11.11% 1 10.00%
Independent Directors 5 55.55% 6 60.00%
Total 9 100.00% 10 100.00%

The Composition of the Board and Committees of the Board along with the changes in composition during the year is detailed in the Corporate Governance Report which forms a part of this Report.

Resignation

During the year under review, Mr. Manohar D Chatlani resigned from the position of Independent Director of the Company with effect from January 18, 2021.

Retirements

Mr. Viren Prasad Shetty, Whole-time Director and Group COO is retiring by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMPs) of the Company are:

Name of the KMPs Position held in the Company
1. Dr. Emmanuel Rupert Managing Director and Group CEO
2. Mr. Kesavan Venugopalan Group Chief Financial Officer
3. Mr. Sridhar S Group Company Secretary, Legal & Compliance Officer

Committees and their Constitution

As required under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has formed four Committees viz, Stakeholders’ Relationship Committee, Audit, Risk and Compliance Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee and the details of membership of the Committees are disclosed in Corporate Governance Report which forms a part of Board’s Report.

Keeping in view the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, the Board reviews the Terms of Reference of these Committees and the nomination of Board Members to various Committees. The recommendations, if any, of these Committees are submitted to the Board for approval.

Number of meetings of the Board

The meetings of the Board are scheduled at regular intervals to decide and discuss on the business performance, policies, strategies and other matters of significance. The schedule of the meetings is circulated in advance to ensure proper planning and effective participation in meetings. In certain exigencies, decisions of the Board are also accorded through circulation.

The Board during the financial year under review met six (6) times. Detailed information regarding the meetings of the Board and meetings of the Committees of the Board is included in the Report on Corporate Governance which forms a part of Board’s Report.

8. COMPANY’S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

Company’s policy on Directors’ appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 is uploaded on the Company’s Website (URL:https:// www.narayanahealth.org/sites/default/files/download/codes-policies/Nomination-and-Remuneration-Policy.pdf).

9. DECLARATION BY INDEPENDENT DIRECTORS OF THE COMPANY

A declaration of independence in compliance with Section 149(6) of the Companies Act, 2013, has been taken on record from all the Independent Directors of the Company.

10. PERFORMANCE EVALUATION OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and Regulations 17 and 19 of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015, evaluation of performance of every director, Board and the Chairman was carried out by the Nomination and Remuneration Committee. The Chairman of the respective committees reviewed the performance of the respective committees. The performance evaluation of Non-Independent Directors and Board as a whole, Committees thereof and Chairman of the Company was also carried out by the Independent Directors through a separate meeting of the Independent Directors. Evaluation of Independent Directors was carried out by the entire Board of Directors, excluding the Director being evaluated.

The evaluation was carried out on the basis of response of the Directors to a structured questionnaire covering various aspects of Board performance such as Board composition and expertise, Board oversight, strategy and direction, Corporate Governance and Board administration, Board oversight during COVID-19 and inputs shared by the Directors at the meeting.

11. RELATED PARTY TRANSACTIONS

The Company has taken necessary approvals as and when required as per the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the transactions entered into with the Related Parties are stated in the notes to accounts, and also in Form AOC-2 as prescribed under the Companies Act, 2013 which is annexed herewith as Annexure II.

12. CORPORATE SOCIAL RESPONSIBILITY

Your Company has formulated a Corporate Social Responsibility Policy (CSR Policy) which is available on the website of the Company at (URL:https://www.narayanahealth. org/sites/default/files/download/nh_investor_relations/ Corporate-Social-Responsibility-Policy.pdf).

Your Company is building a robust support structure to empower the less privileged sections of society. Through its community outreach programs, your Company is building the infrastructure necessary to bring about the changes to ensure improved health and well-being for the community. As a responsible corporate citizen, your Company undertook several social welfare initiatives during the year under review. The Annual Report on CSR activities for 2020-21 as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure - III and forms integral part of this Report.

13. PARTICULARS OF EMPLOYEES

The statement containing particulars in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report and is appended herewith as Annexure IV to the Boards’ Report.

The statement containing particulars in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the aforesaid information, is being sent to the Members of the Company and others entitled thereto. The said information is available for inspection at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy thereof, may write to the Secretarial Team of the Company in this regard.

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is detailed in Annexure V

15. CORPORATE GOVERNANCE

Your Company places utmost importance on its fiduciary role as a guardian of stakeholders’ interest and strives to achieve a mutually aligned objective of value and wealth creation for all interested parties. The Board and the Management humbly acknowledges this role and continues to propagate this belief through all layers of the organization to create an environment of accountability and trust.

These responsibilities continue to be the focus of its attention through the tumultuous ride along the path of expansion, ensuring the highest standards of ethics and integrity in all its business dealings while avoiding potential conflicts of interest. The result of this is a corporate structure which serves its ever-expanding business needs while maintaining transparency and adherence to the above stated beliefs.

A Report on Corporate Governance, including Certificate from CEO and CFO as per Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has been appended as Annexure - VI and forms integral part of this Report.

Further, a certificate from M/s. Ganapathi and Mohan, (Firm Registration Number P2002KR57100), Bengaluru, affirming the compliance with the various provisions of the Corporate Governance as stipulated under Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this Report as Annexure VII.

16. BUSINESS RESPONSIBILITY REPORT

The Board of Directors of the Company has adopted the Business Responsibility Policy of the Company at its meeting held on May 29, 2017 which is available on our website i.e., https://www. narayanahealth.org/sites/default/files/download/codes-policies/ Business-Responsibility-Policy.pdf

Details of the various initiatives taken by the Company towards the wellbeing of consumers, employees and the equitable development of the society at large, sustainability of the environment, etc., are given separately in the Business Responsibility Report attached in Annexure VIII.

17. AUDITORS

A. Statutory Auditors

M/s. Deloitte Haskins & Sells LLP (Firm Registration Number 117366W/W-100018), Chartered Accountants, Bengaluru are the statutory auditors of the Company who were appointed at the 17th Annual General Meeting of the Company held on August 3, 2017 for a period of 5 years.

Auditor’s Report

The Auditors’ have issued an unmodified Report for the year ended March 31, 2021 and hence, do not call for any comments from the Management under Section 134 of the Companies Act, 2013.

B. Cost Auditors

The Board has approved the appointment of M/s. PSV & Associates, Cost Accountants having Firm Registration Number 000304, as the Cost Auditor of the Company for the financial year 2021-22, at a remuneration of H3,00,000 (Rupees Three lakhs) only, exclusive of taxes and reimbursement of out-of-pocket expenses incurred, if any, in connection with the cost audit.

The Board of Directors of the Company proposes the ratification of remuneration of M/s. PSV & Associates, Cost Accountants as the Cost Auditor of the Company, for financial year 2021-22 at the ensuing Annual General Meeting.

C. Secretarial Auditor

The Company has appointed M/s. Ganapathi and Mohan, (Firm Registration Number P2002KR57100), Practicing Company Secretaries to undertake the Secretarial Audit of the Company for financial year 2020-21. The Report of the secretarial audit is annexed herewith as Annexure IX.

Pursuant to Regulation 24A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex with its Annual Report, a Secretarial Audit Report, given by a Company Secretary in Practice. The Company in this regard, has received the secretarial audit report from M/s. Ganapathi & Mohan, Practicing Company Secretaries, having their office at No. 31, Vidya Bhavan, 3rd Floor, West Anjaneya Temple Street, Basavanagudi, Bangalore – 560 004 (and said Report is annexed herewith as Annexure X.

There is no qualification, reservations or adverse remarks made by M/s. Ganapathi and Mohan, Practicing Company Secretaries, Secretarial Auditor of the Company in their Secretarial Audit Report.

The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) with effect from October 1, 2017. The Company has devised proper systems to ensure compliance with its provisions and is in compliance with the same.

18. INTERNAL AUDIT SYSTEMS

Your Company has continued its engagement with M/s. Ernst

& Young LLP, Chartered Accountants, to conduct internal audit across the organization during the year under review. We also have an in-house internal audit team to supplement and support the efforts of M/s. Ernst & Young LLP.

19. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

The second wave of the pandemic has impacted the business with consolidated operational revenue for April 2021 registering a decline of around 7% from March 2021. Since then, there has been decline in the operational trends for May given the rapid increase in COVID cases across all regions of the country. However, the official total positivity rate for India has been registering a steady decline to below 10% as on May 24th compared to a high of 27% on May 5th. We believe that June will experience a material improvement over May on the basis of reduced covid admissions and increase in patients coming in for elective surgeries. Cashflows is being well managed given ample liquidity on books aided by efficient working capital management and profitability during the period.

20. DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

21. PARTICULARS OF LOANS, SECURITIES, GUARANTEES AND INVESTMENTS

The loans given, security provided, guarantees given and investments made by the Company under Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

22. EMPLOYEE STOCK OPTION PLAN

The Company has adopted the Narayana Hrudayalaya Employee Stock Option Plan (NH ESOP), 2015 pursuant to the approval of the Board on September 7, 2015 and the approval of Shareholders on September 12, 2015. The Plan is administered by the Nomination and Remuneration Committee through Narayana Health Employees Benefit Trust. Pursuant to Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 read with Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 the details of the Employee Stock Option Plan are annexed as Annexure XI to this Report.

23. THE EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 the Annual Return as on March 31, 2021 is available on the Company’s website on https://www. narayanahealth.org/stakeholder-relations/annual-return

24. SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operation in future.

25. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of the Company’s operational and financial performance as well as the initiatives taken by the Company in its key functional areas are separately discussed in this Annual Report.

26. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has developed a Whistle Blower Policy with a view to provide a mechanism for employees and Directors of the Company to voice their concerns and grievances in a responsible manner. The policy of vigil mechanism is available on the Company’s website at https://www.narayanahealth.org/ sites/default/files/download/nh_investor_relations/Whistle%20 Blower%20Policy.pdf

Further, details of the same are provided in Corporate Governance Report attached to this Report.

27. DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Policy on prevention of sexual harassment in workplace framed under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committees (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Below is the report on the same containing details of number of cases filed, their disposal, nature of action taken, number of cases pending and number of workshop/awareness sessions conducted.

No. of cases reported No. of cases disposed Nature of Action Taken No. of cases pending No. of workshops conducted (Induction & Refresher) No. of participants
9 9 Out of 9 cases, in 2 cases the services of the respondents were terminated. 6 cases have been settled through conciliation and warning letters issued to the concerned party. 1 case has been withdrawn. Nil 134 3062

28. RISK MANAGEMENT POLICY

The Board of Directors of the Company at their meeting held on October 31, 2018 has decided to entrust the Audit, Risk and Compliance Committee to perform the role of a Risk Management Committee in terms of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and has amended the Terms of Reference of the Committee suitably to include the following:

i. To assist the Board of Directors in meeting its responsibility of oversight on identification, evaluation, mitigation and resolution of strategic, operational, financial, reputational and compliance risks.

ii. To approve Risk Management Policy of the Company and review the same annually to keep it updated to address varying nature and dynamics of risks faced by the Company from time-to-time.

iii. To review management’s assessment of risk at least once in a year and provide an update to the Board in this regard.

The Audit, Risk and Compliance Committee also meets the requirement of composition and other stipulations in terms of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company has implemented Enterprise Risk Management wherein business units and corporate functions review and address risks with the oversight of the Audit, Risk & Compliance Committee and the Board of Directors. This is being facilitated by the Internal Audit team of the Company. The Risk Management Policy of the Company is available on our website i.e., https://www.narayanahealth.org/sites/ default/files/download/codes-policies/Risk-Management-Policy.pdf

29. DECLARATION ON CODE OF CONDUCT

The Company has adopted the Code of Conduct for all its Senior Management Personnel and Directors and the same is affirmed by all the Board Members and Senior Management Personnel as required under Regulation 34 read with Part D of Schedule V of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015. A declaration signed by Dr. Emmanuel Rupert, Managing Director and Group CEO of the Company affirming the compliance with the Code of Conduct of the Company for the financial year 2020-21 has been annexed as part of this Report.

30. ACKNOWLEDGEMENT

Your Directors are grateful for all the help, guidance and support extended to them by patients, bankers, suppliers and investors. Your Directors also wish to thank the medical professionals and employees at each level for their hard work, commitment and performance during the year. Your

Directors wish to recognize the exemplary, untiring, selfless and dedicated services rendered by the clinical staff including doctors, paramedics, nurses and clinical support functions in effectively fighting the COVID-19 pandemic.

Dr. Devi Prasad Shetty For and on behalf of the Board
Chairman Dr. Emmanuel Rupert
DIN: 00252187 Managing Director and Group CEO
Place: Bengaluru DIN: 07010883
Date: May 31, 2021

Declaration on Code of Conduct

To

The Members of

Narayana Hrudayalaya Limited

I, Dr. Emmanuel Rupert, Managing Director and Group CEO, declare that all the Members of the Board of Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct for the financial year ended March 31, 2021.

Place: Bengaluru For Narayana Hrudayalaya Limited
Date: May 31, 2021 Dr. Emmanuel Rupert
Managing Director and Group CEO
DIN: 07010883